Snapchat recently went public in one of the most anticipated tech IPOs of recent time. After listing, Snap is now worth $33 billion, and its founders have done well for themselves – Evan Spiegel and Bobby Murphy are now worth $5 billion each. But just over four years ago, Snapchat was a young startup, and was going through the grind of raising money. It was then Bobby Murphy, Snapchat’s co-founder, had sent investor Chris Sacca a mail.
Murphy had already talked with Sacca about Snapchat, and wanted a follow up meeting. “Hey Chris, I really enjoyed the chat last night – really respect your worldview,” he began in his mail sent on 2nd November, 2012. “It’d be awesome if you could come by for lunch or hang out some afternoon. I’d love to get your opinion on LA vs the Bay and building out a company especially as it related to Snapchat now and in the next few months. Let me know if you have any free time in the next week.”
I know one person who isn't getting rich in the Snapchat IPO. Hint: the guy who didn't reply to this email.
— Chris Sacca (@sacca) March 2, 2017
Sacca understood the subtext behind the mail – founders don’t just want to “hang out” with prominent investors. At the time the mail was sent, Snapchat had just raised a seed round of funding, and was actively looking for investors in future rounds. Sacca is a well-known VC in the valley, having been an early investor in Uber and Twitter and a guest judge on Shark Tank. He probably gets hundreds of such mails every month; he chose to not reply to this one.
He could’ve made a lot of money if he had. Lightspeed Venture Partners, the firm that was the seed investor in Snapchat had put in $8.1 million into the company. When Snap went public, its stake was worth $2.3 billion – a 280x gain in five years. Sacca, though, made nothing, because he never replied to Bobby Murphy’s mail. He was still gracious enough to congratulate them on their IPO.
Such is the nature of entrepreneurship and venture capital. Apart from the financial rewards of building a successful company, what’s probably most satisfying is the feeling of having proved your doubters wrong.